Starting September 26th, Shopify is replacing AVS (Address Verification System) with a new fraud detection model. This means that if you do not opt out of this change, then the AVS requirement will be disabled on your checkout and replaced with a custom model controlled by Shopify.
If you have AVS protection enabled on your Shopify’s checkout settings, then you may have received an email from the Shopify Payments team about this upcoming change.
Shopify states this model is trained on 400+ risk signals across their network of payments. Most likely it’s provided by Stripe which is the underpinning provider for Shopify Payments. It also claims that AVS is already included in this new model, but that seems contradictory since they are also stating the new model will allow payments if AVS fails.
Turn off declining charges that fail AVS postal code verification, as this functionality is already included in the new fraud model, which uses over 400 fraud signals for more precise fraud detection
Shopify has also clarified that CCV verification will still be enforced with this new default setting.
Shopify is the first eCommerce platform to begin limiting access to the AVS fraud protection system.
Shopify is claiming that in testing this new model produced "a boost in payment success rates of up to 0.33%, with more accuracy at detecting fraud and blocking fewer legitimate orders".
The phrasing doesn’t specify why it’s a “rates up to 0.33%”, meaning potentially this is the best test result of one cohort possibly based off of region, industry or size - but not all transactions in a given timeframe.
Shopify always strives to provide the most sensible defaults for new merchants, to reduce the number of decisions in order to reach that first sale. By default, AVS isn’t enabled for new Shopify accounts, it is a setting that needs to be enabled manually by the merchant.
This model may be an attempt to help reduce fraud for merchants passively, while also simplifying their checkout settings. Additionally, the message seems contradictory:
The Address Verification System (AVS) is a tool provided by credit card processors and banks for “card not present” transactions such as online or phone placed orders. The system is designed to help verify that the billing address provided at the time of the transaction actually matches the credit card holder’s registered address.
However, AVS is not as thorough as it may sound. On the surface, it's easy to assume that AVS will check the entire address including fields like name, street address, city, state, and zip. But that isn't quite the case.
For a detailed explanation of how AVS works and what it actually verifies, see our complete guide to AVS.
This does not necessarily mean that your checkout will see an increase of 0.33% in successful payments. It’s just a general statistic.
For example, merchants in automotive, furniture, and jewelry industries will see a much higher fraud risk than those in standard apparel or fashion retail. The GMV per order is much more substantial and are much more value to fraudsters for either online resale or friendly fraud.
So while it may be true that there's a third of a percentage increase in testing of a cohort of merchants, that does not mean that your business will enjoy the same payment success increase.
Yes, if you choose to opt out before September 6th 2025, then you can continue to use AVS verification natively in your Shopify checkout. However, it is unclear if you opt out later that you can re-enable AVS. It’s also uncertain if AVS will be phased out entirely in the future.
For now, Shopify is grandfathering this setting for existing merchants.
Make sure that emails from the Shopify Payments team are not landing in your spam folder. Shopify Payments have elected to communicate these changes over email. Additionally, you can subscribe to the Shopify platform changes for up to date changes to the platform.